Question
Assume that in the market for labor for college basketball, you have the following demand, supply and marginal cost curves: W D = 1400 -
Assume that in the market for labor for college basketball, you have the following demand, supply and marginal cost curves:
WD= 1400 - 18Q
WS = 150 + 16Q
MC = 150 + 32Q
1. Assume initially that there is a competitive equilibrium in the market for college basketballlabor. What is the quantity of labor that will be employed in this market?
2. Assume initially that there is a competitive equilibrium in the market for college basketballlabor. What is thewage that will be paid for labor in this market?
3. Now assume that the NCAA can act as a monopsonist when negotiating labor contracts. What is the quantity of labor that will be employed in this market?
4. Now assume that the NCAA can act as a monopsonist when negotiating labor contracts. What is thewagethat will be paid per unit of labor in this market?
5. Now assume that the NCAA can act as a monopsonist when negotiating labor contracts. What is the value of welfare transferred from athletes to the NCAA?
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Essentials Of Advanced Macroeconomic Theory
Authors: Ola Olsson ]
1st Edition
9780415685085
